Mobile money a big hit in emerging Southeast Asia

Giving millions of “unbanked” people the opportunity to undertake money deals by simply using their mobile phones has turned out to be a highly successful service in emerging countries in Southeast Asia. While the success stories of mobile payment are normally associated with Africa, some Southeast Asian countries are pioneers in this business.

For example, the Philippines leads the region in mobile phone payments with its two popular services, Smart Money and GCash introduced as early as in 2001 and 2004, respectively. This corresponds with the fact that the Philippines have one of the lowest banking penetrations in the region, with two thirds of the 100-million-population living without a bank account, let alone a credit card.

In Indonesia, the first mobile money service, T-Cash, was introduced in 2007. In Cambodia, a mobile money transfer service called Wing has been launched in 2009 which claims it has grown to process $1 billion last year. Another country with a quick adoption of mobile money services was Vietnam, which has a similarly low banking penetration than the Philippines. In 2013, a service called MoMo was introduced by Vinaphone, the country’s second largest domestic mobile network operator, in association with Vietcombank. In Laos, the central bank has adopted the Mobile Money for the Poor (MM4P) initiative of the United Nations Development Programme in December 2014 and has established a working group to launch branchless banking and mobile money services in the country in the near future.

According to the GSM Association, an international grouping of mobile operators and related companies, mobile money services are now available in 61 per cent of the world’s developing countries. As per December 2014, there were 255 live mobile money services in 89 countries worldwide. The latest additions in Southeast Asia have been Myanmar and East Timor last year, the association said.

Myanmar, where currently only 6 per cent of the population have a regular bank account, has seen the introduction of its first mobile money services in January last year when Myanmar Mobile Money, a service supported by state-backed Myanmar Post and Telecommunications and military-owned virtual provider MECTel, was introduced. It will soon be followed by a mobile money service to be launched by Telenor, one of the new mobile phone operators in the country, together with one of Myanmar’s largest commercial lenders, Yoma Bank. Telenor’s competitor in Myanmar, Qatar’s Ooredoo, is also preparing a mobile money services in the wake of its mobile network rollout in the country, with both companies reportedly just waiting for the respective licenses. The Central Bank of Myanmar has not issued guidelines for operator-led mobile money services yet, although this does not deter Myanmar Mobile Money from offering its service as it is defined as a bank-led service.

Observers feel that Myanmar could become a success story in Internet economy in a few years as rapidly growing smartphone usage together with efficient mobile payment services could offset very low levels of financial inclusion, a development that would change many people’s economic prospects especially at the grassroots level.

Giving millions of “unbanked” people the opportunity to undertake money deals by simply using their mobile phones has turned out to be a highly successful service in emerging countries in Southeast Asia. While the success stories of mobile payment are normally associated with Africa, some Southeast Asian countries are pioneers in this business.

For example, the Philippines leads the region in mobile phone payments with its two popular services, Smart Money and GCash introduced as early as in 2001 and 2004, respectively. This corresponds with the fact that the Philippines have one of the lowest banking penetrations in the region, with two thirds of the 100-million-population living without a bank account, let alone a credit card.

In Indonesia, the first mobile money service, T-Cash, was introduced in 2007. In Cambodia, a mobile money transfer service called Wing has been launched in 2009 which claims it has grown to process $1 billion last year. Another country with a quick adoption of mobile money services was Vietnam, which has a similarly low banking penetration than the Philippines. In 2013, a service called MoMo was introduced by Vinaphone, the country’s second largest domestic mobile network operator, in association with Vietcombank. In Laos, the central bank has adopted the Mobile Money for the Poor (MM4P) initiative of the United Nations Development Programme in December 2014 and has established a working group to launch branchless banking and mobile money services in the country in the near future.

According to the GSM Association, an international grouping of mobile operators and related companies, mobile money services are now available in 61 per cent of the world’s developing countries. As per December 2014, there were 255 live mobile money services in 89 countries worldwide. The latest additions in Southeast Asia have been Myanmar and East Timor last year, the association said.

Myanmar, where currently only 6 per cent of the population have a regular bank account, has seen the introduction of its first mobile money services in January last year when Myanmar Mobile Money, a service supported by state-backed Myanmar Post and Telecommunications and military-owned virtual provider MECTel, was introduced. It will soon be followed by a mobile money service to be launched by Telenor, one of the new mobile phone operators in the country, together with one of Myanmar’s largest commercial lenders, Yoma Bank. Telenor’s competitor in Myanmar, Qatar’s Ooredoo, is also preparing a mobile money services in the wake of its mobile network rollout in the country, with both companies reportedly just waiting for the respective licenses. The Central Bank of Myanmar has not issued guidelines for operator-led mobile money services yet, although this does not deter Myanmar Mobile Money from offering its service as it is defined as a bank-led service.

Observers feel that Myanmar could become a success story in Internet economy in a few years as rapidly growing smartphone usage together with efficient mobile payment services could offset very low levels of financial inclusion, a development that would change many people’s economic prospects especially at the grassroots level.